Sometimes, something other than bills arrives in the mail. And, if what you receive is a ‘Cease and Desist’ letter, it’s best not to ignore it.
According to Caroline Z. Worley, a business lawyer in Columbus, a cease and desist letter is appropriate in a variety of circumstances, particularly in employment, contract and Intellectual Property situations. Examples where a cease and desist letter are an option include when a business owner believes a former employee is violating a no-compete agreement or if someone is using a logo or trade name similar to one already in use by another company.
In the Intellectual Property arena, a cease and desist letter is usually sent “because an owner of IP has found someone misusing their IP and wants to formally go on record asking them to stop,” says Joseph Dreitler, a trademark and patent attorney in Columbus.
What to do if you get one Don’t panic if you receive a Cease and Desist letter. Just because you got one does not necessarily mean anything you are doing violates someone else’s rights. That’s not to say it should be ignored, either. If the letter alleges the misappropriation of some kind of intellectual property, Dreitler advises showing it to a lawyer knowledgeable about IP and IP litigation.
Often, a Cease and Desist letter is sent as a last-ditch effort to avoid the incredible costs of litigation. If such a letter is sent and no response is received, the IP owner has the option of pursuing litigation to enforce their rights. Litigation is also a possibility if a response doesn’t satisfy the party alleging the infringement.
Worley advises anyone receiving a Cease and Desist letter to call the person alleging the infringement to discuss the situation. “Find out exactly what is being claimed. You can often resolve issues that way,” she says. Sometimes, the infringement occurred as a result of confusion rather than purposefully, so a conversation about the alleged infringements is a good place to start. Certainly, while hiring a lawyer versed in defending cease and desist allegations is also a smart move, Worley recognizes not all small business owners are able to afford such an option. She suggests tapping into community resources available to entrepreneurs for reduced fees or even at no cost, such as SCORE, an organization comprised of retired specialists emanating from a myriad of professions.
If infringements of intellectual property are raised in the letter, Dreitler says hiring an experienced IP lawyer is the way to go. “Hire a good lawyer who can analyze all the facts of what the small owner is doing and give advice on whether they can reject the letter and why, agree to the letter, or try to negotiate something in the middle because of the facts,” he says. Sometimes, the owner of the IP will issue a licensing agreement to the infringer, if the price is right.
How to avoid receiving a cease and desist The best way to avoid being the recipient of a cease and desist letter is by doing the research necessary to ensure no one’s rights are being violated by your actions. “Do your due diligence up front to save money on the back end,” says Worley.
Dreitler suggests speaking with an IP lawyer “before you start using brand names, business names, trade names, copyrighted works or patented processes and have a good IP lawyer do searches and give you a legal opinion on the risks of going forward using the IP you think you might be able to use.”
Employment and contract matters are generally governed by state law, so it’s best to consult with a business attorney licensed in your state when allegations of infringements arise. Still, federal statutes and even case law can come into play, more reasons to consult with an experienced attorney. As for allegations relating to the improper use of someone’s copyright, patent and trademark, federal law governs.
People send cease and desist letters because they want to protect their business assets. That’s because without them, “their business is not worth anything, anyway,” sums Worley.